In this article we would like to outline some of the key benefits for incorporating an offshore company.
Why Incorporate Offshore?
1. Low Taxation:
Most offshore companies pay no local taxes on the income derived from offshore operations, i.e. from activities outside of the jurisdiction of company formation. These offshore companies include Belize IBC, Seychelles IBC, BVI BC and others.
Companies in some on-shore jurisdictions, where we provide incorporation services as well, also have comparatively low taxation. For instance, a Hong Kong Company pays no taxes on profits from operations generated outside of Hong Kong. At the same time, onshore companies must comply with all relevant filing requirements, which are often costly.
2. Anonymity:
Registrars in most offshore jurisdictions do not disclose information about directors, shareholders and beneficiaries of offshore IBC companies. Thus, the underlying principal may carry out all relevant transactions in the name of an offshore company while remaining anonymous. It is important to note that this applies to leglitimate operations only.
3. Asset protection:
In the international business context, it is usually the laws of the jurisdiction of incorporation that are applied, rather than those, where the company is being sued. Many offshore jurisdictions are renown for their favourable asset protection laws. Complementing an offshore company with an offshore banking facilities, protects company’s assets even further.
4. Ease of Reporting:
The compliance reporting requirements for offshore companies are limited, especially in comparison to companies, registered in onshore jurisdictions. Most offshore IBC companies are not required to file annual reports and accounts in the jurisdiction of the company formation. Instead, local authorities charge a flat annual licence fee, which is insignificant in comparison to reporting expenses and taxes in onshore jurisdictions.
5. Operating Costs and Fees:
With limited reporting requirements, offshore companies generally have lower maintenance and operating fees. The cost of compliance, preparation of accounts and auditing in on-shore countries is often considerable while offshore companies save on these particular expenses.
Registered office fees are also significantly lower than buying or renting premises in onshore jurisdictions. A virtual office could be also set up at the registered address of the company to further lower the effective fees of running one’s business.
For information and fees of various offshore solutions, please visit Finlaw.in on setting up an offshore company.